The total investment of insurance companies reached fifty seven billion

Kathmandu : According to the provisions of the investment guidelines issued by the Insurance Authority, the currently operating insurance companies have invested amount of 57 billion Rupees.

According to the investment guidelines of Nepal Insurance Authority, 28 insurance companies, 14 life and 14 non-life, which are currently operating, have further expanded the scope of investment in various pre-banking areas, including fixed deposits of banks and financial institutions.

The total investment of insurance companies is more than 686 billion. The total investment of life insurance fund, insurance fund, reserve fund, catastrophe fund and capital raised by life and non-life insurance companies has reached more than 6 billion. This amount is about half of the total budget of Nepal.

Life insurance companies have managed to invest 6 trillion 22 billion rupees in various sectors including banks and financial institutions. According to the data published by the companies, non-life insurance companies have invested a total amount of 63 billion 64 million rupees in various sectors including banks and financial institutions.

It is seen that the main part of the investment of insurance companies is deposited in the banks of Nepal in the form of fixed deposits. So far, it has been seen that insurance companies have invested nearly four billion rupees as deposits in banks.

Although it has been nine years since the authority issued the investment guidelines, the insurance companies have not been able to diversify their investable funds according to the investment guidelines. Insurance companies analyze the security and risk and invest in other areas because there is a risk, so a lot of money is kept in the bank’s fixed deposits.

According to the directives, insurance companies must invest a minimum of 20 percent in savings bonds or bonds of the Government of Nepal, a minimum of 30 percent in term deposits of banks of category A and Nepal Infrastructure Bank Limited, a maximum of 10 percent in banks of category C, 10 percent in ordinary shares of listed public limited companies, 10 percent in real estate business, 10 percent in ordinary shares of listed public limited companies,20 percent in preference shares and debentures of A’, ‘B’ and ‘C’ class banks and financial institutions, 20 percent in secured debentures of listed public limited companies, 10 percent in agriculture, tourism, water resources and other infrastructure, 5 percent in mutual funds and citizen investment funds, There is a provision to invest 5 percent in investment companies.

Although the area for investment has been specified in the guidelines, insurance companies have invested a large amount of money in fixed deposits of ‘A’ class commercial banks. Apart from fixed deposits of commercial banks, insurance companies have not reached the limit in any sector according to the investment guidelines.

According to the Nepal Insurance Authority, life and non-life insurance companies have invested 6 trillion 86 billion rupees by the end of the year 2024/025 A.D (2080/081 B.S).

Executive Director of Nepal Insurance Authority Rajuraman Paudel says that insurance companies are working slowly according to the investment guidelines issued by the authority.

Insurance companies are investing according to the investment guidelines. However, most of the companies are investing in fixed deposits,” he said. “Companies seem to have less investment in physical infrastructure, development, construction, tourism, agriculture and other sectors.

He said that insurance companies are in the process of expanding their scope in that area as well. Recently, insurance companies have started investing in airlines, agriculture and other sectors. Paudel says that it is appropriate for the company to invest only in companies that will give reasonable returns.

Life Insurance Company

 Life insurance companies have invested a total of 6 trillion 22 billion 41 billion 32 million rupees in banks and various sectors during the period of the second quarter of the year 2024/025 A.D (2080/081 B.S).

percent of the total investment has been invested in deposits.

Life insurance companies have invested 4 trillion 84 billion rupees only in term deposits of banks licensed by Central Bank of Nepal. According to the investment guidelines issued by the authority, 1 trillion 38 billion rupees have been invested in other various sectors.

Life insurance companies have the largest amount of money in fixed deposits of ‘A’ category banks. Companies have kept 4 trillion 32 billion rupees during the second quarter.

Second, they invested 45 billion rupees in preferential shares, bonds, debentures and debentures of Central Bank Nepal, 40 billion 30 million rupees in ‘B’ category banks, and 35 billion 83 million rupees in other investments.

Life insurance companies have made the least advances in bank term deposits, unlisted companies and investment companies.

Non-Life Insurance Company

Non-life insurance companies have invested 63.64 billion rupees in various sectors including fixed deposits with banks and financial institutions till the second quarter of the year 2024/025 A.D (2080/081 B.S).

Non-life insurance companies have invested 80 percent of the total investment in term deposits of A, B and C category banks and financial institutions and infrastructure banks licensed by Nepal Rastra Bank.

Among the non-life insurance companies, there is an amount of 48 billion 28 billion rupees in fixed deposits of banks of categories A, B and C. Non-life insurance companies have kept 4.34 billion rupees as reserves in banks and financial institutions of category A.

Similarly, 1 billion 10 million rupees have been deposited in B category banks and 3 billion 47 million rupees in C category banks.